Federal prosecutors, including the U.S. Department of Justice, are investigating whether Binance Holdings Ltd. allowed Iran to circumvent U.S. sanctions through its platform, according to Bloomberg reporting citing people familiar with the matter.
The investigation follows a DOJ action last week in which the agency seized and sought to forfeit $61 million in cryptocurrency alleged to have originated from black-market sales of sanctioned Iranian oil. According to the DOJ, the funds were laundered through Binance by Chinese entities.
Iran has increasingly turned to bitcoin and other cryptocurrencies to evade U.S. sanctions. In April, the U.S. began targeting crypto wallets linked to the Iranian regime, Treasury Secretary Scott Bessent said in a statement. Bessent noted that Iranian regime cryptocurrency holdings had been frozen, predominantly in the form of Tether's USDT stablecoin.
Last week, the Treasury designated BitBank, an Iranian crypto exchange, as part of Operation Economic Outcast, the Trump Administration's economic campaign against Iran and its enablers.
Iran has adopted bitcoin for strategic economic purposes this year, including launching a bitcoin-backed insurance service for its shipping companies. Unlike many other cryptocurrencies, bitcoin cannot be frozen. Financial Times reporting this month indicated that Iran was using bitcoin to settle cross-border transactions through Iranian crypto exchanges after the central bank encouraged its citizens to support the economy through such measures.
Binance has faced previous enforcement action from U.S. authorities. The exchange, incorporated in the Cayman Islands, allegedly allowed funds linked to virtual theft and terrorism to flow through its platform undetected. Binance exited the U.S. market and agreed to pay $4.3 billion in settlement. CEO and founder Changpeng Zhao stepped down after pleading guilty to anti-money laundering violations, though he was later pardoned by President Trump.
